New revenue collection numbers released by the New Jersey Department of Treasury show that collections have improved after several slow months, but are still below budget projections.

The revenue numbers have become an increasingly partisan battle in New Jersey as a property tax credit being pushed by Gov. Chris Christie hangs in the balance. Democrats say that the state can’t afford the property tax credit after New Jersey has incurred hundreds of millions of dollars in budgetary shortfalls, while Christie argues that it’s essential for the state’s recovery and growth.

The $2.3 billion in tax collections in September were up 4% from the same month in 2011, an increase of 4%, according to the state treasury’s release. The income tax was particularly strong, rising by 7% from $956,550 in September 2011 to more than $1 million last month.

“Key indicators continue to show that New Jersey’s economy is expanding at a steady pace,” said Dr. Charles Steindel, Chief Economist for the treasury.

Sales tax was up 5% when compared to September 2011, an upswing after several months of declines. Casino revenues and the corporation business tax also showed some improvements.

But in the fiscal year that began in July, tax collections were down 4% from budget projections, amounting to a $175 million shortfall. That’s in addition to a shortfall of more than $250 million from last budget cycle.

Christie has said that the property tax credit is a key way to make New Jersey more competitive to continue to attract tax-creating businesses.